Aussie Parity With Kiwi Seen as Rates Diverge: Chart of the Day
This article is for subscribers only.
Australia’s dollar is set to weaken to parity with its New Zealand peer for the first time, HSBC Holdings Plc predicts, as contrasting economic fortunes force a widening of the gap in interest rates.
The top panel of the CHART OF THE DAY shows the Aussie fell below NZ$1.05 in January this year in what was only the third time in the currencies’ post-float histories as traders correctly bet the Reserve Bank of New Zealand’s benchmark interest rate would exceed that of its Australian counterpart. The bottom panel shows the 240-day correlation between the Aussie-U.S. dollar rate and the kiwi-greenback pair falling last week to the lowest since 2007 as the currencies’ moves reflected diverging central bank signals.